2017 (9) TMI 297

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....CIT(A)] is bad, both in the eye of law and on the facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the penalty amounting to Rs. 30,66,318/- levied by the JCIT, under Section 271C of the Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the penalty ignoring the fact that it is not a case of failure to deduct tax but deduction of tax at the rate of 2% under Section 194C under a 2 bonafide belief, as against 10% deductible under Section 194J of the Act. 4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in ignoring the fa....

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....e to be executed with the manpower, material and supplies by M/s NYSA 3 Communications Pvt. Limited. For this work, the assessee made payments to M/s. NYSA Communication (P) Ltd., Delhi amounting to Rs. 3,83,29,004/- on which TDS was deducted @ 2% u/s. 194C instead of 10% as applicable during the year on fees paid for professional & technical services as per section 194J of the IT Act. Accordingly, a demand of Rs. 30,66,318/- was raised against the assessee on account of short deduction of tax at source and for this default a penalty equivalent to the short deduction of tax was imposed by the AO u/s. 271C of the IT Act. The ld. CIT(A) in appeal of the assessee, confirmed the penalty imposed by the AO. 3. We have heard both the parties an....

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....vide letter dated 13.07.2011, ITO (TDS) asked the assessee for details for TDS deducted of M/s Nysa Communications as per section 194J and details of TDS deposited. In response to the same assessee filed its reply on 01.08.2011 enclosing details of payments so made. Similar query was raised from Nodal office also. In response to the same, Nodal officer submitted the detailed reply 5 referring the above notice issued to DDE, stating its inability to deduct TDS @2%. 4.2 However, ITO (TDS) Rohtak on the basis of information provided by the assessee issued a show cause notice dated 25.8.2011 asking the assessee to explain why tax was deducted by it @2% as against 10%. Thereafter the assessee vide its letter dated 01.09.2011 asked the ITO (TD....

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....afide and reasonable cause on the part of the assessee for short deduction of TDS as the assessee was under a genuine and bonafide belief for not deducting the tax at source u/s 194J instead of 194C as stated by the company M/s NYSA Communications P Ltd on the basis of their previous invoices and as per the expert opinion of Chartered Accountant. Both confirmed that the TDS was deductible @2% and the same was accordingly deducted. Still being dissatisfied, the assessee asked the ITO TDS to advice on the said issue who advised to deduct tax @10%. Accordingly, the assessee deducted the tax @10% and paid the difference along with interest on the amount short deducted by it. Ld. AR further invited our attention to the proviso to section 201(1) ....